Reading this selection of stories it is clear that the much-heralded era of ethical consumerism is getting ever closer. The huge gap between peoples’ espoused values (saying they want to buy goods and services from responsible companies) and their actual behaviour (demonstrated in purchasing decisions) is beginning to close.
According to the most recent Co-operative Bank Ethical Consumerism Report (www.co-operativebank.co.uk) expenditure on ethical goods and services has almost doubled in the past five years. The report shows that in 2007 the overall market for ethical goods in the UK was worth £32 billion a year – this includes spending on items like organic and fair trade produce, energy efficient products and environmentally friendly travel such as public transport. However, as the report concedes, this remains a tiny proportion of the total annual consumer spend of more than £600 billion.
The point remains that consumers are becoming more aware of the issues and are casting an increasingly critical eye on the actions of business. In particular, consumers are less tolerant of companies that make inflated claims about the social or environmental credentials of their products and services. The days when a company could operate to different health, safety, labour or environmantal standards in countries outside its home market have passed. Operating standards and procedures need to be consistent across the world in today’s global community.
In the same way, as consumer behaviour slowly shifts, companies will need to ensure there is an internal consistency between what they say and how they act. Companies will fail to attract the ethical shopper if they urge consumers to take action when they are not playing their own part in addressing their social and environmental impacts.
RELATED NEWS
Taxing disposable bags
The packaging and waste advisory body, WRAP, called for a tax or levy on throwaway bags on March 10, saying such action could have a significant effect on customer behaviour, encouraging people to re-use bags for shopping. WRAP objects to the use of free single use carrier bags, claiming they are a highly visible part of litter and that they do not degrade quickly. WRAP believes that any action must tackle all carrier bags, and must encourage the reuse of bags, such as the bag-for-life schemes. The organisation also made clear that the proceeds generated from such taxes should be used to fund schemes, which encourage behaviour and benefits the environment, for example improving local recycling facilities.
Contact Wrap 01295 819 900 www.wrap.org.uk
Convalence Food & Beverage Industry Report 2007
The food and drink sector is strengthening its ethical record through labour and environmental initiatives according to a report published on February 11 by Covalence, the Geneva-based ethical reputation research firm. The Covalence Food & Beverage Industry Report 2007 uses a reputation ranking system called EthicalQuote and found that Unilever was the top performer in 2007, followed by Starbucks and Diageo.
Until 2006, ethical emphasis within the food and beverage trade had been on social and labour initiatives. However, in 2007, there was a shift towards environmental issues. Chief projects have included addressing waste, packaging, tackling climate change and energy consumption.
A report published by Talking Retail, the website, and market research company Nielsen has found that UK customers are increasingly choosing food and drink brands with ethical credentials. Brands that grew the fastest in 2007 where those perceived as kinder to the environment or those which had put the environment at the centre of their brand strategy. Innocent who were the fastest growing brand overall with sales up 45.6%, launched 100% recycled bottles and switched to greener electricity. Walkers Crisps, ranked as the third biggest brand, grew by 5.2% last year. It was the first company to announce its carbon foot print on packaging, and have launched a campaign promoting its use of British-only potatoes. Checkout Nielsen Top 100 Grocery Brands 2008 was published on February 28. Talking Retails is a free-access website focused on the global grocery industry.
In the first 10 months of 2007, the European Commission received 56% more consumer safety alerts than during the same time frame in 2006 according to a new report from the law firm Freshfields Bruckhaus Deringer. The report – Getting it right – product recalls in the EU – was published on March 11 and is based on research carried out on 100 key manufacturing and retail companies.
The report finds that while 75% of companies feel that product safety regulation in the EU is “about right”, 40% of companies have not established good working relationships with regulators. Fifty-three per cent of companies think that tougher regulation and/or tougher enforcement recently is the reason behind increased levels of product recalls, and 45% of companies that have dealt with product recalls recently report damage to their reputation and/or customer loyalty.
In response to these findings, the report uses Freshfields’ experience in helping clients handle recalls to make a number of suggestions. The report lays out steps companies should take in the period after the discovery of a product safety issue. It also provides help for companies making insurance claims after product recalls, and identifies key provisions that should be included in incident management policies.
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